A Rocky Rollout for the Individual Mandate

Monday, December 30, 2013

It should be news to no one that the implementation of the Affordable Care Act (“ACA”) requirement that individuals without employer sponsored health insurance must be covered by minimum essential coverage (the individual mandate) has been anything but seamless.  Both federal and state health insurance exchanges have experienced dramatic crashes that have severely limited the ability of individuals to evaluate and apply for online coverage.  Although improvements are reported daily, along with additional difficulties, it is clear that those responsible for the implementation of health care reform are well into Plan B, which includes increased reliance on in-person and written applications for coverage.

Even as enrollment numbers improve, other hurdles loom ahead. Will insurers receive the information needed to enroll a successful applicant into the correct coverage option? Will the system of subsidies and credits be properly applied to the individual’s premium? Will sufficient numbers of younger, and presumably healthier, individuals sign up for coverage so that their premiums will help offset the higher costs of covering older or less healthy individuals, who are eagerly taking advantage of the opportunity to obtain coverage that might not previously have been available.

As a result of this muddled rollout, the deadlines facing those without employer-sponsored coverage have been softened. Originally, such individuals had to sign up for coverage by March 31, 2014. No penalty would be assessed so long as an individual did not have coverage for three consecutive post-2013 months. In other words, an individual who lost employer sponsored coverage had three months within which to find coverage under another employer’s plan or sign up through an exchange. An individual without employer sponsored coverage on January 1, 2014, who signed up for coverage that did not go into effect until after March 2014, would face a penalty for exceeding this short coverage gap exception.

More recent HHS guidance changes this rule. Now, no penalty will be assessed if the individual just signs up for individual coverage by March 31, 2014, even if the individual did not have coverage for January, February, and March 2014.  Remember, however, signing up for coverage by the March 31, 2014 deadline does not mean that the coverage itself is retroactive.  If the individual decides to wait until March to sign up for coverage but then incurs medical expenses in January or February 2014, those medical expenses will not be insured. They will remain the individual’s responsibility.

FMLA: Discipline Unrelated to Leave Is Not Retaliatory

The New Hampshire Federal Court issued a recent decision affirming that an employer may take disciplinary action against an employee who has taken FMLA leave, provided the information is accurate and unrelated to the leave.  The Court in Ameen v. Amphenol Printed Circuits, Inc. (Opinion No. 2013 D.N.H. 177) granted summary judgment for the employer against an employee claiming he was terminated in retaliation for taking FMLA leave, and noted “an employee may not immunize himself from being discharged for reasons unrelated to the FMLA simply by taking leave under that statute.”

The employee had taken approved leaves following the birth of his child, but upon his return it was reported that he had been violating the company lunch and break policy by the manner in which he had punched in and out for breaks.  An investigation determined he was receiving a fifteen minute paid break per day in violation of company policy and it had been occurring for two years.  The supervisor who decided to terminate the employee had no knowledge of the FMLA leave.  The Court declined the plaintiff’s invitation to apply the cat’s paw theory of imputing motive up the chain to that decision maker because the individuals who made the initial report and reported the results of the investigation produced accurate information.  The Court concluded that if it allowed accurate reporting of employee misconduct unrelated to the FMLA conduct to count as evidence of retaliatory animus, an employer’s ability to discharge an employee for reasons unrelated to the protected FMLA conduct would be “significantly constrained.”

Had the facts been different – for example, if the information reported to the decision maker was inaccurate – the result would likely have been different.  While this opinion affirms an employer may discharge an employee for legitimate reasons unrelated to protective FMLA activity, the decision maker must take care to ensure the accuracy of the information that serves as the basis for the adverse employment action and that it is truly unrelated to the leave.

Changes at the Maine Human Rights Commission

Friday, December 13, 2013

The new counsel to the Maine Human Rights Commission, Barbara Archer Hirsch, spoke to the Employment Section of the Maine Bar Association yesterday.  She announced one significant change in how the Commission would be processing charges, but did not otherwise anticipate major changes of policy or procedure.  The investigators will no longer rule on the issue of constructive discharge- they see it as a damages issue only that they should not weigh in on. 

A plaintiff’s attorney sitting next to me expressed concern because, for example, in a whistleblower’s case, he sees the constructive discharge as a tangible employment action, an essential element of the charge. Despite the Law Court’s recent holding, the Commission will still process some kinds of claims against individual supervisors- where the accusation is that the supervisor “aided and abetted” the discrimination or retaliated against an employee.  Ms. Archer Hirsch acknowledged that the remedy against an individual would not include monetary damages. 

Unfortunately, Ms. Archer Hirsch indicated the Commission does not currently have a plan to reduce its backlog or expedite processing charges. All in all, the mission seems to be to carry on the status quo.

New Causation Standard for Title VII Retaliation Claims

Thursday, December 12, 2013

It can be difficult for employers to decide how to address employee misconduct when that employee has reported discrimination and the investigation is ongoing.  The fear of prompting a retaliation claim can create paralysis.  A recent decision by the New Hampshire federal court provides support for employers who wish to take adverse employment action when justified.

In Hubbard v. Tyco (Opinion No. 2013 D.N.H. 165), the District of New Hampshire analyzed a Title VII retaliation claim where the employee claimed his termination for insubordination was really in retaliation for reporting discrimination.  The Court granted summary judgment for the employer, finding Hubbard had not met the “but-for” standard.  The Court, following First Circuit precedent, framed the issue as follows:  if Hubbard had not reported discrimination, he still would have been terminated for insubordination, and there was no evidence that Hubbard would have been terminated if he had not engaged in the insubordinate conduct.  If those questions can be answered in that fashion, the adverse action is not retaliatory.

This opinion confirms that it is more difficult for an employee to prevail in a Title VII retaliation claim.  The U.S. Supreme Court, in University of Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 2517 (2013), clarified that Title VII retaliation claims require proof of “but-for causation” rather than the lessened causation test for discrimination claims (where a plaintiff need only show that discriminatory animus was a motivating factor for the adverse action).  This requires proof that the unlawful retaliation would not have occurred in the absence of the alleged wrongful action of the employer.

Make Your Holiday Parties Fun and Lawsuit Free

Friday, December 6, 2013

The holiday season is upon us.  It is the biggest season for office parties.  These parties give rise to the most law suits filed against an employer.  Today I read a great article from “Law 360” (subscription required) that provides an employer with great advice that allows a holiday party to still be enjoyable while at the same time reducing the of the party turning a legal nightmare.  The article lists five tips for employers: 1. Keep Alcohol Consumption Down, 2. Pick the Right Time and Location, 3. Don’t Make It Mandatory to Attend, 4. Ask Managers to Watch for Trouble, and 5. Remind Employees that Work Place Rules Still Apply.

Safeguarding Trade Secrets and Proprietary Information

Most states, including Maine, have statutes protecting trade secrets.  These statutes provide an important measure of protection to employers wishing to safeguard their proprietary information.   For employers, the issue of trade secrets often arises when an employee leaves to join a competitor or strike out on their own.  The concern is that, upon leaving, the employee will abscond with the employer’s information and use or disclose the information without the employer’s consent.  To help prevent this kind of misappropriation, employers should be sure that they have adequate policies in place governing the treatment of trade secret information.

As a case in point, in Dana Limited v. American Axle and Manufacturing Holdings (W.D. Mich. 2013), an employer sued two employees who had left to join a competitor.  Prior to leaving, the employees downloaded several of the employer’s files onto their personal computers and storage devices.  The employer claimed, among other things, that the employees misappropriated its trade secrets by downloading the files onto their devices.

The court disagreed, however, and found that there was insufficient evidence to show that the employees acquired the employer’s files through improper means.  In reaching this conclusion, the court noted that the employer did not have a policy that prohibited employees from storing company information on personal computers and storage devices.  Because there was no such prohibition, the employer could not show that the employees acquired the information through either theft, bribery, misrepresentation, or some other improper means.

Although the Dana case highlights the importance of having established policies in the first place, it also serves as a useful reminder to periodically review them to ensure they are up to date.

NH Labor Department Targets Misclassification of Employees

Monday, November 25, 2013

James W. Craig, the new Commissioner of the New Hampshire Department of Labor, addressed the Labor & Employment Section of the New Hampshire Bar Association on November 19, 2013.  Mr. Craig indicated that his chief enforcement priority is misclassification of employees as independent contractors.  He intends to bring “the hammer down” on those who violate the law.  The Department has freed up two investigators who can respond quickly in the field to potential issues and is making Spanish-speaking investigators more available to facilitate communication in the field.  The Commissioner has hired a new lawyer to assist in prosecuting cases, to avoid adverse results at hearings or reductions in proposed fines.  The Department is also becoming more aggressive in collecting unpaid fines.  The Commissioner cautioned that he is not targeting the “mom and pop” businesses who are trying to do things by the book, but who may have made honest mistakes; he is targeting those who intentionally skirt the law or who are repeat offenders.

RSA 275:4,II essentially treats every person who is engaged in employment as an employee.  Only those who meet all of the seven criteria under the law may be treated as independent contractors.  It is very difficult to meet all of the criteria under the law.  With this emphasis on pursuing offenders and imposing heavy fines, employers should take great care to ensure compliance with RSA 275:4 before treating any worker as an independent contractor.

Flexible Spending Accounts Become More Flexible

Friday, November 22, 2013

Flexible Spending Accounts (FSAs) or Health FSAs for years have let employers provide pre-tax dollars through employee salary reductions or employer contributions to an FSA account that the employee can spend as he or she pleases for qualifying medical expenses.  The down side, especially if the FSA account were composed of salary reductions, was the “use-it-or-lose-it” rule.  This rule meant that unused money in an FSA account was forfeited at the end of the plan year.  Naturally, this led to end of year buying binges by employees who did not want to leave unused FSA money on the table.  Not only did this encourage potentially unnecessary spending but it also prevented employees from setting aside unused funds for a rainy day when a few extra dollars might go a long way to offsetting unexpected medical expenses during the next plan year.

Recognizing this problem, the IRS in 2005 allowed employers to include in their FSA plans a grace period of up to 2 ½ months after end of the previous plan year for employees to spend amounts left in their FSA account.  For the first time, Health FSAs, like Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs), gave employers and employees the ability to moderate spending that was encouraged by the “use-it-or-lose-it” rule.

In late October of this year, the Treasury Department announced a new option that gives FSAs greater flexibility.  FSAs can now offer a $500 maximum rollover option that lets employees spend unused FSA account balances during the next plan year.  Not only does this defuse employee ill will caused by the forfeiture of unused balances, the new rule also lets the employee use the saved money after the expiration of the optional 2 ½ month grace period that was permitted under previous guidance.  Although the employer has to choose between the grace period option and the rollover option (a plan cannot have both options), it is clear that employees who are careful with their FSA money can look forward to managing those funds in a way that maximizes their usefulness, especially where medical expenses in a given plan year exceed the maximum amount (up to $2,500) that can be contributed to a Health FSA.

Overall, this small change is the kind of flexible thinking that makes a Flexible Spending Account a useful way to promote prudent use of healthcare resources.  For those employers who offer Health FSAs, it is a small but not insignificant way to make healthcare more affordable for everyone.

Authored By: Randall Weill, a partner in Preti Flaherty's Labor and Employment Group.

Retaliation in Discrimination Matters: A View from the MCAD

Having spent seven years as Commissioner of the Massachusetts Commission Against Discrimination, I have come to the realization that the charge of retaliation can lead to big and perceived problems for an employer.  I am only going to discuss two of ways that retaliation can impact an employer.  The first relates to an employee who brings a sincere claim of discrimination, harassment or failure to accommodate to the employer's attention.  An employer’s first instinct may be defensive.  The employer is angry at being accused of discriminating against an employee, and takes an adverse employment action against the employee.  The employee then files a claim of discrimination and retaliation against the employer.  The Commission may find a lack of probable cause on the charge of discrimination, but a finding of probable cause on the retaliation.  In order for an employee to prevail on a charge of retaliation, there does not need to be a finding that the employee was discriminated against.  An employer who is confronted with a claim of discrimination, harassment or failure to provide a reasonable accommodation by an employee should listen to the employee’s complaint, conduct a prompt impartial investigation, and take appropriate action.  Following these three steps should reduce the chance of a claim of discrimination and retaliation being filed, and, if filed, increases the chances  the charge of retaliation will also be dismissed.

A second source of retaliation claims involves an employee who believes that he/she is about to be fired.  To protect from being fired, the employee goes to the employer, alleging discrimination, harassment or failure to provide a reasonable accommodate by the employer.  The employee knows that by alleging a claim of discrimination, that the employer could be faced with a claim of retaliation as well as claim of discrimination, if the employer terminates the employee after being informed that the employee believes that he/she exercising a protected activity.  This course of action by the employee does not mean that you still cannot move forward with the termination.  An employer’s best defense to avoid such a charge is to document, document, document.  If employer documents the issues it has with an employee and informs that employee of the problems informally throughout the employment and during the review processes, an employer may end up with a better employee and/or reduce the risk of having a charge of discrimination and relation filed against it.  It will also, if a charge of discrimination and retaliation is filed, increase the probability that the charges will be dismissed. 

Interview with new MHRC Counsel Barbara Archer Hirsch

Thursday, November 21, 2013

On October 7, 2013, Barbara Archer Hirsch took over the position of Commission Counsel from John P. Gause at the Maine Human Rights Commission, after winding down a long career in private practice.  Born in Portland, Barbara attended Harvard University and the University of Maine Law School.  Following law school, Barbara clerked for Judge Conrad K. Cyr of the United States Court of Appeals for the First Circuit.  We caught up with her shortly after she settled into her new job:

For our followers not familiar with your background, outline your bio for us.

I’m a native Mainer – I grew up in Portland, and graduated from Deering High School.  I left for Harvard knowing two things: I would never live anyplace smaller than Boston, and I was going to be a doctor.  As you can see, things didn’t exactly go according to plan!  I moved back to my hometown, and spent a couple of years teaching nursery school and figuring out what I really wanted to do.  That led to law school, which I loved.  I clerked for Judge Cyr right after law school, and then entered private practice, where I spent the next 15 years focusing mostly on employment law and civil rights issues.  On a personal level, I have two wonderful children from my first marriage, and am a blissful newlywed – I was remarried this summer.

So what's your first month as Commission Counsel been like?

It’s been incredibly busy!  I’ve been learning all of our processes from start to finish, and have developed incredible respect for our five investigators.  I remember grumbling about Investigator’s Reports now and then in private practice, particularly with regard to how long it took to get a decision after filing a charge.  Now that I know what goes into them, I regret being so quick to judge!  I started in my position just as the Commission published a proposed rewrite of its employment regulation, so I’ve also gotten a quick lesson in legislative rulemaking.  I recently served at my first Commission meeting.  I started that day searching for a copy of Robert’s Rules of Order and ended it by running the public hearing on our new proposed rules.  I’ve been to dozens of Commission meetings over the years, but I can tell you now that the experience of representing the Commission itself is nothing like the experience of representing a client in front of the Commission.  I need to know all the arguments that the parties might make in any case on the agenda – we just published the December agenda, which has 51 cases on it – and be prepared to answer legal questions about any of them.  It’s demanding, challenging, exhilarating . . . and I’m going to sound a little sappy here, but it’s an honor to be given the chance to do the work, and I hope to rise to the occasion.

Any surprises?

I was surprised at how different the Commission’s work is behind the scenes.  The amount of time, effort, and caring invested in each case and in trying to reach a just result is a bit humbling.  I was also surprised by the range of issues that can come up in any given day – I thought I had seen a lot in private practice, but there are new issues and twists to the Maine Human Rights Act that come across my desk on a very regular basis.

How you do hope to leverage your experience in private practice in your new position?

I practiced in front of the Commission throughout my time in private practice, so I understand how the process is perceived by outside counsel, as well as by Complainants and Respondents.  I hope to use my knowledge to improve our processes and our work product, and make them more user-friendly.  I represented both Complainants and Respondents in employment discrimination cases while in private practice, so I think I have a better perspective on the issues faced by all of our constituents, as opposed to a lawyer who worked only for employers or only for employees.  Of course, employment is just one piece of what I do now, so I will need to translate that experience into the housing and public accommodation arenas as well.

Do you have any areas of interest that you're especially interested in or committed to?

I’ll mention just a couple.  The first is LBGT issues.  There have been huge strides made in attaining equal treatment for gay and lesbian individuals, but there is still a lot of work to be done to educate employers and public accommodations on what is and isn’t legal.  The transgender population, in particular, remains tremendously vulnerable.  We’re very lucky to have just received a grant which will allow our Executive Director to do outreach programs throughout the state focusing on LGBT issues in fair housing, and I’m looking forward to seeing that project move forward. We also received a second grant for our Executive Director to do outreach to Mainers who have limited English proficiency; this is a fantastic opportunity to reach underserved people who are part of our communities. Another area I feel strongly about is in the area of disability discrimination: I feel that “invisible” disabilities - like depression, PTSD, or traumatic brain injury, all of which are common among our returning veterans - are still incredibly misunderstood, which results in discriminatory treatment. Again, it’s an area where education is necessary, both for individuals struggling with these disabilities and for those who work with them.

What regulatory developments can be expected from the Commission over the next 12 months?

As I mentioned, we just held the public hearing on our proposed new rules.  We’ve proposed a complete repeal and replace of the employment regulation, which updates the regulations and incorporates concepts from our federal counterparts where our laws are substantially equivalent.  The other new rule we proposed was an amendment to our procedural rule which deals with mediation.  We’re eager to move our mediation program forward, and the new rule allows us to do that.  We’ll be charging participants a small fee in order to cover the cost of the mediator, although there will be waivers available for parties who are unable to pay even the modest charge.  It’s a great opportunity to settle disputes early on, with highly trained and professional mediators. Our program offers this benefit at a bargain price compared to what private mediators charge, and we hope people will take advantage of it.

ADA: Testing and Transfer Accommodations

Friday, November 15, 2013

In Montemerlo v. Goffstown School District No. 2013 DNH 134 (DNH decided October 4, 2013) the United States District Court for the District of New Hampshire clarified certain burdens imposed on the employee and employer when addressing multiple accommodations under the ADA.  The Court’s opinion is a reminder of the importance of engaging in the interactive process and highlights the importance of written job descriptions.
A school teacher who requested an accommodation to test her blood during the work day filed suit claiming she was denied a reasonable accommodation.  The Court rejected that claim finding that the District had agreed to provide her with coverage when she needed to leave the class room to test.  The Court found it unreasonable that the teacher never requested coverage but filed suit because she wanted to test her blood in her classroom.

The teacher also requested a transfer to an open position that she believed was more consistent with her disabilities.  The District did not respond to the transfer request.  The Court declined to grant summary judgment for the District.  The Court began the analysis by noting that “a disabled employee does not have a right to a transfer to a new position simply because she is disabled [, but the] request to transfer must in fact address the disabilities that prompt the request.”  The District asserted the request for a transfer to a new position was not a request for accommodation because it had provided a reasonable accommodation (the coverage for blood testing), but the Court held “the duty to provide a reasonable accommodation is a continuing one, however, and not exhausted by one effort.”  Because the District failed to respond to the transfer request and thus did not engage in the required interactive process, the District could not show it was entitled to judgment on that claim.  The District also argued that the letter requesting the transfer was not specific and did not provide the required notice.  The Court rejected this argument finding that the issue should be examined in light of the District’s long-standing awareness of the teacher’s disabilities.

This case serves as a reminder that an employee’s request for accommodation under the ADA is sufficient if it directly and specifically gives notice of the need for accommodation and explains how the request is linked to a disability.  The Court will inquire whether the employer knew or reasonably should have known that the reason for the employee’s request was her disability; the employer cannot make its decision by narrowly considering the employee’s request as the Court will examine the totality of the employer’s knowledge.

A written job description identifying the essential functions of the position are important to the analysis of what reasonable accommodations are available, and the absence of a job description may make it more difficult on the employer to determine how to respond to an accommodation request.  It is the employee’s burden to show that she is a qualified individual, which demands the employee establish she possesses the requisite skills, experience, education and other job related requirements for the position and that she is able to perform the essential functions for the job with or without reasonable accommodations.  A job description will make the essential functions clear and will guide the employer’s decision.

When Timing Isn't Everything: Court Finds that Timing of Termination Alone Fails to Establish Pretext for Retaliation

Tuesday, November 5, 2013

In many retaliation cases, the timing between a protected activity and an adverse employment action is an important factual issue.  To a large degree, this is a matter of common sense.  After all, when we think of cause and effect, we often think in terms of time and tend to assume that contemporaneous events are more likely to be related to each other than events occurring at more distant intervals.  It is no surprise, then, that employees often use (and courts often accept) evidence of close timing between a protected activity and an adverse employment action to satisfy the basic elements of a retaliation claim.

Yet evidence of temporal proximity only goes so far, as a recent decision from the U.S. District Court for the District of Massachusetts illustrates.  In Wagner v. Baystate Health, Inc., a hospital lab assistant claimed her employer retaliated against her for taking FMLA leave by reprimanding her six weeks after returning from leave and then terminating her two weeks later.  The court found that the timing between the lab assistant’s leave and her discipline was sufficient to make out a “threshold” claim for retaliation and that a reasonable jury, looking just at the chronology without any other explanation, could conclude that the hospital retaliated against the lab assistant for taking FMLA leave.  However, the court found that the timing alone was insufficient to establish retaliation once the hospital provided a reasonable explanation for its actions.  In this case, the hospital explained its actions by pointing to a history of increasingly negative performance evaluations and the lab assistant’s failure to improve her behavior even after being put on a performance improvement plan.  Given the hospital’s explanation for the sequence of events, the court found the lab assistant needed to provide some additional evidence, other than timing, to show how the hospital’s explanation was invalid.
Wagner provides additional support for the proposition that an employee must show more than temporal proximity to overcome an employer’s legitimate non-retaliatory explanation for an adverse employment action.  At the same time, the decision serves as an important reminder for employers to document employee performance and any resulting disciplinary issues.  In the absence of this documentation, a disgruntled employee may have a better shot at convincing a judge that, in fact, “timing is everything.”

Does Healthcare Reform Have A Future?

Monday, October 28, 2013

I suppose it is a mark of the times that health care reform has long ceased to be a public policy debate about the state of health care in America.  Instead, it marks the latest dividing line between opposing visions of what America is and what it ought to be.  To those opposed, Obamacare represents an existential threat to the continued existence of the prototypical self-reliance individualism that defines the “true” American.  To those convinced that “social justice” demands that our society provide what can be the most basic of human needs, the Affordable Care Act, passed by the legerdemain of an ascendant Democratic Party, remains a fundamental step toward erasing inequality of every kind in America.  Both sides have a point.  The United States has indeed been populated by those who saw opportunity in many forms and sacrificed to take advantage of it to benefit themselves and their families.  On the other hand, Pilgrim settlers in New England sought religious refuge to create their own “City on a Hill” and America has never lacked for utopian ideas and those who believe in them.  Oddly, both points of view are quintessentially American. We want to reward hard work and risk taking and at the same time we recognize a civic to help others.

What is lost in this debate, however, is a more immediate concern. How do we solve the problems facing health care in America.  While it is indeed imperfect, the Affordable Care Act has sown seeds for improvement in what was a deeply flawed, was increasingly dysfunctional, expensive, and unworkable health care system.  We cannot simply revert to the world as it existed prior to the enactment of health care reform in 2010, and this point has so far escaped the notice of many caught up in today’s mindless political debate.

So, does health care reform have a future?  The answer:  Yes, but it is a hugely complex problem and it will be expensive, it will not be the most logical outcome, and it will only happen when those who elect our politicians tell them that something must be done to make it better.  The road will not be straight.

When Job Applicants Volunteer Union Membership

Friday, October 25, 2013

I recently provided some compliance counseling in a situation where an employer engaged in hiring laborers for a new construction project encountered applicants who brought up their union affiliation during the interview process or included union-specific content on their application materials.  Because the employer sensed he might be entering dangerous waters, he reached out for guidance.

The federal agency that determines whether an employer has committed an unfair labor practice is the National Labor Relations Board (NLRB).  When a labor union or union member believes that an employer has evaluated the suitability of job candidates according to their pro-union opinions, past union membership or interest in union organizing, the union or union member will often report that conduct to the NLRB and request an investigation.

The basic test the NLRB has developed for evaluating whether a pre-employment hiring process violates federal labor laws is whether, under all circumstances, the employer's process reasonably tends to restrain, coerce, or interfere with rights guaranteed by those laws.  For example, the NLRB has determined that questioning job applicants during interviews violates federal law when the questions are designed to generate information for the employer about pro-union opinions, past union membership or interest in union organizing, and when the interview includes threats of unfavorable consequences if the applicant engages in pro-union activity or has contact with union organizers.   Even in cases when the job applicant is hired, the NLRB can still determine that questions during the job interview concerning former union membership and union preference are unlawful.

The problem, of course, is that sometimes unions send their organizers -- known as “salts” -- to actually apply for jobs with an employer and, during the interview process, these persons openly announce that they are pro-union or intend to organize for the union while working.  The U.S. Supreme Court has held that even these persons must be treated like any other job applicant, without discrimination.

The following rules MUST be followed at all times by supervisors and all hiring personnel:
  1. Do not ask applicants about union membership either on a form or during an interview.
  2. Never tell union applicants that no jobs are open while running a help wanted ad or hiring off the street.
  3. Never hire non-union applicants with little experience for skilled jobs, despite the fact that qualified union applicants are available.
  4. Never tell union applicants that interviews or written applications are required while hiring other applicants without them.
It is important for supervisors and all hiring personnel to be aware of the basic rules of salting.  Your failure to respond properly can result in litigation against the employer, including severe financial damages and penalties.
"What if an applicant tells me during an interview that he or she is a union member without my asking?"
That should make no difference to your hiring practices. Just follow your normal procedures.  Do not respond negatively, angrily or critically when statements like that are made during an interview.  Your response to any reference to union membership or pro-union opinions should be, "It is our practice to hire the best qualified applicants.  We give no preferential treatment to anyone nor do we discriminate against anyone on the basis of their union membership."

FLSA: Employer Liability for Uncompensated Work Time

Wednesday, October 16, 2013

An employee who works through mandated lunch or meal breaks without recording the hours, and who is thus not compensated for all hours worked, can present a thorny issue for the employer, as the employer is exposed to a Fair Labor Standards Act claim for failing to pay for the work performed.  Resolution of the employee’s claim for compensation for missed lunch or meal breaks will turn on whether the employer knew or should have known of the uncompensated work; if the employer allowed it to happen, the employee must be compensated. FLSA regulations are clear about this:  (1) “work not requested but suffered or permitted is work time.”  (29 C.F.R. § 785.11); and (2) if the “employer knows or has reason to believe that [a worker] is continuing to work [then] the time is working time.”(29 CFR § 785.11).

It is easy to say that if the employer does not know or have reason to know that the employee is working uncompensated hours the employer is not liable under the FLSA, but it can be difficult to prove this negative.  A written policy requiring employees to report all work time and to report missed breaks, and making payment to those employees who make such reports, is one way an employer can ensure that it pays employees for all time worked and is not subjected to liability for uncompensated work.  This was confirmed earlier this month when the United States Supreme Court declined to hear an appeal from a decision by the Sixth Circuit Court of Appeals ruling for the employer.

In White v. Baptist Memorial Health Care Corp., 699 F.3d 869 (6th Cir. 2012), the Court granted summary judgment for the employer, basing its decision on the employer’s written policies and the employee’s failure to comply with the policies.   The written policy in the employer’s handbook provided that employees were entitled to unpaid meal breaks that were automatically deducted from the paycheck and also provided that if an employee missed a meal break or the meal break was interrupted for a work-related reason, the employee would be compensated for the time worked.  The employees were instructed to record on a log all of their time spent working.  Ms. White signed a document indicating she understood the policy.  For a time she completed the log (and was paid for the missed breaks) but she then stopped doing so and later claimed she should be paid for the time worked during the meal breaks that were deducted from her paychecks.
The bottom line from the White case is if an employer establishes a reasonable process for an employee to report uncompensated work time and the employee fails to follow the process, it is unlikely the employer will be liable.  A different result could occur if there was evidence the employer discouraged employees from following the process, but short of that it is unlikely a court would hold an employer liable when it had no way of knowing the employee was working uncompensated hours.

U.S. Supreme Court Considers Age Discrimination Claims Under the Equal Protection Clause of the Constitution

Tuesday, October 15, 2013

Last week the United States Supreme Court opened its 2013-2014 session with oral argument in a case involving whether state and local government employees may avoid the Federal Age Discrimination and Employment Act remedial scheme by instead bringing age discrimination claims directly under the Equal Protection Clause of the Constitution and 42 U.S.C. § 1983.  ADEA claims are brought against an employer, while § 1983 claims are brought against individual government actors.  The damages that can be recovered differ as well.  The Seventh Circuit in Levin v. Madigan grabbed the Supreme Court’s attention when it ruled that a former Senior Assistant Attorney General in Illinois was not bound by the ADEA and was allowed to pursue an action against various Illinois state officials for age discrimination under § 1983.  This ruling is contrary to the holdings of several other circuit courts, including the First Circuit, which covers, among other states, all of Northern New England.

Complicating the case is that the issue seems to have been framed in terms of whether or not an individual with an ADEA claim is precluded from bringing a § 1983 claim (the Seventh Circuit said no).  In the case before the Supreme Court, the individual plaintiff himself was not even eligible to bring a claim under the ADEA because he fell under an exemption from coverage for certain government officials in policy-making positions.

Though a decision could be months away, the Court’s ruling may significantly impact state and local governments’ ability to defend age discrimination claims.  If the Supreme Court adopts the rationale of the Seventh Circuit, then municipal and state governments in Northern New England can expect to see a likely increase in the complexity and scope of age discrimination claims.

First Circuit Enforces Non-Solicitation Agreement in Favor of Employer

Monday, October 7, 2013

Can a former employee circumvent a non-solicitation agreement if he or she merely accepts business from former customers and does not actively solicit them?  Recently, in a decision sure to please employers, the First Circuit Court of Appeals said no—not if the employee plays a role in “piquing” the customers’ curiosity and “inciting” their initial contact.

In Corporate Technologies, Inc. v. Harnett, an account executive argued that he was not in breach of a non-solicitation agreement because the customers in question had initiated contact with him, not vice-versa.  Rejecting this argument, the First Circuit found that the identity of the person making initial contact was not determinative and that it was simply one fact to be considered along with many others.  In this case, the “other facts” included a blast email that the account executive had sent to a targeted group of prospective clients, including the customers in question, announcing his new job at a competing business.  Notably, the customers reached out to the account executive only after they received the email.  The First Circuit found that this targeted email, which was designed to “pique customers’ curiosity,” clearly crossed the line from mere acceptance of business to active solicitation. 

The result in Corporate Technologies is good news for employers.  Although the decision makes clear that employees are entitled to make public announcements of changes in employment, it also makes clear that employees may not use those announcements in creative ways to circumvent valid non-solicitation agreements.

Authored by Kevin Haskins, attorney with Preti Flaherty's Employment Law Practice Group.  For more information on employment related matters, contact Kevin at 207-791-3076 or a member of the Employment Law Group.